Audio Visual TOD Fees – Necessary Evil or Just Plain Evil?

“TOD fees” or “Contractor Supervisor Charges” were a subject brought up in the “AV Unravelled” session at the MEA National Conference, held in Brisbane. What are TOD fees? Are they necessary? Can you avoid them?

Many hotels now charge a fee when a conference organiser brings in an Audio Visual provider other than the in-house AV company. The theory is that it is reasonable for the hotel to have a representative from their AV company on site to protect the hotel from damage and ensure safety standards are upheld. The TOD (Technician on Duty) is also there to assist the AV company to integrate with the hotel itself.

Perhaps this is quite a reasonable request as sometimes installations are very late or very early and someone is needed onsite to let the AV people in. Not all hotels have someone on duty 24 hours per day. Sometimes there are issues with power, or patching, or internal hotel policies to adhere to where this can be quite helpful. Perhaps then it is reasonable to factor in that there may need to be someone onsite during the set up of an event, at least at the beginning.

What is becoming increasingly concerning for conference organisers and audio visual companies that do not focus their client relationships on hotels and venues is that the charges for TOD do not seem to end there. In more and more hotels, fees are charged for the duration of the entire event, from bump in to bump out. For a basic two day, one room conference this can be a cost of $1500. That can be a huge part of the budget.

Even more alarmingly, some hotels are now charging not just during the bump in and bump out and the duration of the conference, they are also charging this fee per room! This could mean that a relatively basic two day conference with three breakout rooms could incur TOD Charges of $4000+. Unfortunately, the story gets worse for those who are managing budgets. In at least one hotel in Sydney, as well as all of these costs, there is also an unexplained $1000 penalty just for bringing in the external AV company. This fee is not for any service, it is charged “just because.”

The following is an excerpt from the Trade Practices Act:

Exclusive dealing

It is unlawful for a supplier to attempt directly or indirectly to interfere with the freedom of buyers to buy from other suppliers or to sell to whom they choose, for example by imposing territorial or customer restrictions on the buyer, if such conduct has the purpose or effect of substantially lessening competition…

Supplying goods or services on condition that the buyer will acquire other goods or services from another supplier, even a related company, is prohibited outright regardless of its effect on competition (third line forcing)…

Does this practice of charging high TOD fees constitute anti-competitive behaviour? We think so.

So, what do we do? How do we push back against this problem which is decreasing competition and driving up prices? It was great that this topic came up as a point of discussion at the MEA conference, but what is next? Who will challenge this “standard hotel policy” enforced by a growing number of venues? Is this something our industry associations like MEA and BECA and our Convention Bureaus should be investigating? What do you think?

Here are a few helpful tips if you would like to negotiate your way out of paying TOD fees. Ask yourself these questions:

Does your preferred AV company have a strong OH&S policy?

Has your preferred AV company worked in the venue before? Are they familiar with the set up?

How much money are you already spending with the hotel?

How many room bookings are you bringing to the hotel?

As the audio visual industry has become more and more competitive in recent years, this issue has become more prevalent throughout venues and has been allowed to grow gradually, without question. It puts unnecessary strain on event budgets and threatens to squeeze out the AV companies that choose to focus their business relationships directly with event organisers, as opposed to the hotels.

About the author – Darren Irvine.

Darren Irvine is the Sales and Marketing Manager at CMS Australasia, an Audio Visual Production company operating across Australia.

So what do your think? – please add you comments below (Ed)

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One Comment

Russell Bennett

As hotels and venues have started to realize the money they can make on audio visual equipment hire without a single dollar spent on AV investment they have started to become excessively greedy. Many AV Hire & Staging companies will rightly argue that the current situation has restricted the growth on the AV Industry with the restrictions in place – and the greed continues, venues recieve up to 30% commissions from AV suppliers on equipment and quiet often labour.

In relation to TOD fees unfortunately as highlighted above some AV companies have worked in many of these venues for years without any problems and have an intimate knowledge of the venue and suddenly find they have to pay TOD fees and the in-house supplier is alo then having to supply a skilled technician at a low rate to the venue, so once again the venue can make a sizable profit on the recharge. For the inhouse supplier it just doesn’t make sense to have a skilled technician baby sitting a venue when they badly need that skilled technician on other events where they have their stock at least on hire.

Then you have the venues charging the non in-house AV Company to use the loading docks, lifts etc yet they don’t charge any other supplier such as bands, DJ’s, plant hire companies etc for use of the same – this is a charge they level directly at the non in-house AV supplier direct and not the venue hirer – bit rich when the contract for the venue hire is with the client and not the non in-house AV supplier.

AV Hire and Staging Companies have arguably one of the largest investments in stock and assets of any part of the Events Industry and are the ones who support and sponsor every major industry event but where are the industry associations on the subject of TOD’s and commissions.

I also never see a declaration in any AV or venue contracts advising of the commission arrangements in place between the two parties – which in itself I believe to be illegal.